Wednesday, May 04, 2005

So Much For Chavez's "Populist" Credentials

Via, this Houston Chronicle story about increasing chaos in the Venezuelan oil industry. The smaller companies are rethinking their presence in the country, but the majors are stuck, and now the
Speaking to reporters at the Offshore Technology Conference on Tuesday, Ramirez argued that the deals already signed by the foreign companies were concessions masquerading as service contracts.

In effect, they were never really legal, Ramirez said.

So now, under the country's new hydrocarbons law, the international oil companies will have to sign new production sharing agreements in partnership with the national oil company PetrĂ³leos de Venezuela maintaining a majority interest.

Under the old contracts, Ramirez said, some companies were not paying their fair share. "Many companies ... pay zero taxes," Ramirez said through an interpreter.

And in a potentially ominous sign, he compared some of those companies to Yukos, the once mighty Russian oil company dismembered by the Kremlin.

Meantime, actual production has dropped by 100,000 barrels per day, and Chavez suspects sabotage by the oil workers' union may be partially at fault:
Venezuela's oil production has unexpectedly fallen by 100,000 barrels per day, and officials are investigating whether that drop could partly be a result of sabotage, President Hugo Chavez said Tuesday.

Chavez said the problems arose mainly in oil fields in western Venezuela, adding that the decline is also linked to other factors, including "management errors" and a lack of maintenance on some wells.


But his comments came as union leaders said the state oil company, Petroleos de Venezuela S.A., or PDVSA, was halting agreements with contracted companies employing about 8,000 workers in the same region of the country.

Chavez and labor having a tiff? No...